Conditions ease in residential land market

A new report from the Housing Industry Association and CoreLogic RP Data shows there was some relief from the tight land market conditions in the June 2015 quarter.

According to the report, national residential land sales increased by 17.6 per cent during the period, while the weighted median residential lot price increased by 0.6 per cent over the quarter to be 5.2 per cent higher than 12 months earlier.

HIA economist Diwa Hopkins said the rise in lands sales was accompanied with an easing of price increase compared to the previous quarter that saw strong price increases and declining land sales.

“While the June quarter result is an encouraging development, what needs to occur is similar results being sustained over the longer run,” she said.

“That is, a larger and more consistent flow of shovel-ready land needs to be brought online.”

According to Ms Hopkins, policy reforms need to address key land supply bottlenecks such as unnecessarily long planning delays, the slow release of residential land, and excessive infrastructure funding arrangements and zoning restrictions.

CoreLogic RP Data research director Tim Lawless said the break in the trend of declining land sales is a positive outcome.

"A 17 per cent jump in vacant land sales is impressive, but land sales remain lower than the June quarter of last year and comes after three quarters where volumes consistently fell and prices rose. The most encouraging sign is that this quarterly rise in vacant land sales is broad-based with five of the six states showing a substantial boost in sales," he said.

"With detached approvals remaining relatively flat since early 2014, the likelihood of this recent surge in vacant land sales developing into a stronger trend is unlikely."